Article Info

Chinese Market Blame Game

Many readers don’t have the time or interest to delve into the financial details of markets. The media made much hay of the February 27th market collapse and the fact that the Chinese market triggered it. This of course, is pure nonsense, and a good example of how all media, including the financial media, tend to pin the blame on the issue that is in closest cognitive proximity.

There is a good Chart of the Day that puts the Chinese market “crash” in the context of recent gains. No one in the media mentioned anything when the Chinese market fell 11% in a matter of days in January.

Discussion

Comments are disallowed for this post.

  1. For some reason people just feel better if they think they know a reason why something is going up or down. The whole China blame game may have been a red herring, but when the media reports on it the way they have (or the way they’ve covered the subprime market) there is almost a self fulfilling prophecy to their coverage. At the end of the day, it’s earnings that should drive the prices, but when Chicken Little keeps telling you that the sky is falling, it’s still hard to stay confident, even when you know that it’s not true.

    Posted by Davis Freeberg | March 23, 2007, 10:11 AM